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14 EXCISE LAW TIMES [ Vol. 372

2020 (372) E.L.T. 14 (S.C.)
IN THE SUPREME COURT OF INDIA
S.A. Bobde CJI., B.R. Gavai and Surya Kant, JJ.
COMMR. OF C. EX., NAGPUR
Versus
UNIVERSAL FERRO & ALLIED CHEMICALS LTD.
Civil Appeal Nos. 848-852 of 2009, decided on 6-3-2020
1
EXIM - DTA clearances by EOU - Clearance of goods manufactured on
basis of job work - C.B.E. & C. Circular Nos. 67/98-Cus., dated 14-9-1998 and
74/99-Cus., dated 5-11-1999 initially restricting facility of undertaking job work
by EOU/EPZ to specific sectors amended by C.B.E. & C. Circular No. 49/2000-
Cus., dated 22-5-2000 permitting EOU to undertake job work in all sectors - All
transaction between EOU and DTA entered into after necessary permission
obtained from Development Commissioner - Clarification by Joint Develop-
ment Commissioner that no bar on such activity under EXIM Policy - In terms
of paragraph 9.9(b) of EXIM Policy, 1997-2002, Circulars issued by Board, par-
ticularly C.B.E. & C. Circular No. 49/2000-Cus., dated 22-5-2000 and reply to
query of Customs Authorities by Development Commissioner, SEEPZ as-
sessee entitled to carry out job work on behalf of DTA on payment of duty as
provided under Notification No. 8/97-C.E. - Such clearance also supported by
clarification in C.B.E. & C. Circular No. 38/2003­Cus., dated 6-5-2003 - Conten-
tion that combined reading of proviso to Sections 3(1) and 5A(1) of Central Ex-
cise Act, 1944 would not entitle Central Government to grant any exemption to
an EOU when it brings goods to any other place in India (i.e. DTA) not sus-
tainable - Such interpretation would render words “unless specifically provid-
ed in such notification” in Section 5A(1) ibid otiose - Harmonious construction
of Section 5A(1) ibid and proviso thereto would be that EOU which brings ex-
cisable goods to any other place in India would not be entitled for a general
exemption notification unless specifically provided in such a notification -
Such exemption provided under Notification No. 8/97-C.E. as amended by No-
tification No. 21/97-C.E. - Transaction between assessee and DTA unit satisfy-
ing all three conditions required under said notification - 2001 Amendment to
Section 5A ibid brought clause (ii) of sub-section (1) of Section 5A ibid in sync
with words used in clause (i) of proviso to said section and words used in pro-
viso to Section 3(1) ibid - No conflict in amended provisions of clause (ii) of
proviso to Section 5A(1) ibid and said exemption notification - Sales made by
EOU to DTA unit within permissible limits and with permission of Develop-
ment Commissioner - Finding of Tribunal in 2015 (321) E.L.T. 462 (Tribunal)
that benefit of clearance at rates applicable under Notification No. 8/97-C.E.
could be denied to assessee, affirmed. - Paragraph 9.9(b) and Paragraph 9.17(b) of
the EXIM Policy operate in totally different fields. Under paragraph 9.9(b), an EOU is
entitled to sell upto 50% of the FOB value of exports to DTA subject to payment of appli-
cable duties and fulfilment of minimum NFEP as prescribed in Appendix-I of the Policy,
whereas under paragraph 9.17(b), an EOU is entitled to undertake job work for export,
on behalf of DTA units, with the permission of Assistant Commissioner of Customs, pro-
vided the goods are exported direct from the EOU/EPZ units. In such type of exports, the
________________________________________________________________________
1 On appeal from 2015 (321) E.L.T. 462 (Tribunal); See also 2015 (321) E.L.T. A209 (Tribunal).
EXCISE LAW TIMES  1st April 2020  176